Musk Says Tesla Probably Will Pay Off U.S. Loan WednesdayAlan Ohnsman
Elon Musk, Tesla Motors Inc.’s chief executive officer and co-founder, said in a Twitter post the electric-car maker will “probably” repay its Energy Department loan as early as tomorrow.
A separate announcement Tesla was planning on the expansion of its so-called Supercharger network is being pushed back to next week “given govt loan repayment this week (prob Wed),” Musk said yesterday.
The maker of Model S sedans was planning to pay off the remaining portion of its Advanced Technology Vehicles Manufacturing loan this week, two people familiar with the matter told Bloomberg on May 17.
Tesla said last week it plans to use $452.4 million from proceeds of a stock and debt offering to extinguish the loan, issued through a green-cars program created under President George W. Bush in 2007 and implemented by President Barack Obama in 2009. The Palo Alto, California-based company and the Energy Department each had declined to comment on the timing.
Tesla on May 17 expanded the size of its equity and debt offerings by 30 percent to as much as $1.08 billion to boost cash reserves and repay the federal loan that had fueled political controversy. Shanna Hendriks, a Tesla spokeswoman, said yesterday the company isn’t providing further details.
Paying the loan off nine years ahead of the original deadline of December 2022 sets Tesla apart from fellow recipient Fisker Automotive Inc., which failed in its own bid to profit from rechargeable autos, as well as large carmakers that aren’t under pressure to reimburse the Energy Department.
The green-car loans, along with Energy Department funds for failed lithium-ion battery manufacturer A123 Systems Inc. and solar-panel maker Solyndra LLC, have been a target of criticism from Republicans, including Senators Charles Grassley of Iowa and John Thune of South Dakota. Darrell Issa of California, chairman of the House Oversight and Government Reform Committee, held hearings on Fisker’s loans last month.
“It would be noteworthy and even surprising if another high-profile loan recipient is able to repay its loans,” Grassley said in an e-mailed statement on May 16.
The standard repayment schedule for Ford Motor Co.’s $5.9 billion loan and Nissan Motor Co.’s $1.4 billion loan is 10 years. Fisker missed a loan payment and is at risk of bankruptcy after halting output last year and firing most of its staff last month.
Tesla completed drawing down its loan funds as of Aug. 31, 2012, and has already made payments to the Energy Department of at least $25 million, based on company filings. As a result, taxpayers may see at least a $12 million profit.
Tesla last year began installing solar-powered Supercharger stations on major U.S. highways to allow for rapid recharging and extended driving range for the battery-powered Model S. The luxury car, with a $69,900 base price, is rated by the U.S. as traveling as far as 265 miles (426 kilometers) per charge.
Musk has said the company will enlarge that network of chargers -- most of which are currently in California -- that allow a car to be repowered in about 30 minutes.
Tesla fell 1.7 percent to $89.94 at the close in New York. The shares had risen 166 percent this year through yesterday, topping the 17 percent gain for the Russell 1000 Index.
Gains for Tesla shares, along with SolarCity Corp., a solar power company also led by Musk, have raised his fortune to $5.7 billion, according to the Bloomberg Billionaires Index.